How to Avoid Making Emotional Financial Decisions

With the unexpected passing of my husband, I’ve had a lot of unplanned decisions required of me. I’ve been very intentional about not making emotional decisions, but to be honest, how do you remove emotion?

There are both rational and emotional elements to making financial decisions.

“Research has found that negative emotions hit us with an intensity that’s two-and-a-half times as strong as positive emotions because they are signaling a disturbance you should tend to,” says Maggie Baker, Ph.D., author of “Crazy About Money: How Emotions Confuse Our Money Choices and What to Do About It.”

Even if you are grieving, you’ll still need to make some decisions related to your new financial situation. Feeling overwhelmed by a “money issue” can be paralyzing, preventing you from addressing what needs to get done. It’s one of the most common feelings that stops people from taking action. Feeling overwhelmed may be the result of a perceived lack of control.

“When there is a sense of mourning attached to money, people may go into avoidance mode, where they don’t want to think about it, touch it or spend it,” Baker says. “The money becomes a symbol of loss and they think that if they just obliterate it from their mind, they won’t feel sad.”

Bottom line: don’t allow your emotions to hijack a financial decision.